Indiana officials received notification from the Obama administration on Wednesday stating that if the state continued to withhold some funds from Planned Parenthood, the state could potentially lose over $4 billion in Medicaid funds.

In late April, the Indiana legislature passed HB 1210, a law cutting Medicaid funding to Planned Parenthood, a leading abortion provider. Gov. Mitch Daniels signed the bill into law on May 10 and has not yet commented on yesterday’s letter.

The letter signaled the Health and Human Services Department was denying Indiana’s May 12 application.

Medicaid administrator Donald M. Berwick sent the letter to Indiana’s Medicaid director, saying withholding funds from Planned Parenthood would improperly keep some citizens from receiving vital health care services. Federal law requires that Medicaid beneficiaries have the right to obtain services from any qualified provider.

Berwick’s letter says in part, “Medicaid programs may not exclude qualified health care providers from providing services that are funded under the program because of a provider’s scope of practice. Such a restriction would have a particular effect on the beneficiaries’ ability to access family planning services.”

Indiana officials should have expected the proposed changes to the state’s Medicaid plan would be rejected, Berwick said.

State Rep. Eric Turner (R-Cicero), the prime sponsor of HB 1210, had released a statement on April 28, saying, “At the end of the day this piece of legislation will allow more women and families in Indiana to make a better informed decision concerning the life of an unborn child.”

Turner told the Indianapolis Star on Wednesday, “We believe we represented the public’s opinion to this, and we’ll see what happens. It’s another example of the federal government trying to tell states what to do. I think states are very capable of deciding their own fate and running their own ship.”

House Bill 1210 received overwhelming support in both the House and Senate. Opponents argued the law could leave 9,300 Medicaid patients, many of whom receive birth control and test for sexually transmitted diseases with adequate health care.

The letter did not surprise Indiana Right to Life Legislative Director Sue Swayze.

“This is the most pro-abortion president we’ve ever had,” Swayze told the Indianapolis Star.

Medicaid is a federal-state partnership that covers more than 60 million low-income citizens, including seniors, children and those without access to health care services.

Although federal law prohibits using funds, including federal funds to provide abortions, Planned Parenthood also provides other services such as cancer screenings and family planning. But supporters of blocking tax dollars from being directed to Planned Parenthood argue that even if federal funds are not directly used to pay for abortions, they are used to support non-abortion related activities that free funds for abortion services.

Planned Parenthood, a nationwide abortion provider has 28 clinics in Indiana, four of which perform abortions.